European based grocery chains, Royal Ahold and Delhaize Group (NYSE: DEG) have agreed to a merger that will generate a market value of $29 billion, providing service to millions of consumers across the Atlantic and expanding as one of the five largest food chains in the United States.
The two Dutch based companies discussed about the merger for years, reportedly conferring the issue in 2006, as they aim for expansion and greater savings against their competitors.
For each Delhaize share, Delhaize shareholders will receive 4.75 Ahold share. An estimated 61% of the merged company will be owned by Ahold shareholders, while the other 39% will be acquired by Delhaize shareholders.
In the last year, combined total sales of the two grocery chains peaked at $60.6 billion (54.1 euros).
Although the two merged companies do not prestige in all American shoppers, both gain most of their earnings from the United States. Ahold operates other large market chains such as Stop & Shop and online grocery retail Peapod, while Delhaize owns the Food Lion and Hannaford banners.
Ahold will integrate its $33 billion annual revenue with Delhaize’s $21 billion. The new board will consist of the current chairman of Delhaize, Mats Jansson, and Chief Executive of Ahold, Dick Boer, as CEO. In reality, Ahold is the preeminent company of the deal.
The combined grocery chains, Ahold Delhaize, will consist of more than 6,500 stores with 375,000 workers providing service to over 50 million consumers a week in Europe and the United States.